Bloomberg says Apple will use Alibaba's technology for its on-device AI models, specifically as a layer on top that can censor certain materials and information for the Chinese government. Alibaba will be able to ask Apple to make updates to its AI models if China's government asks, and Apple will apparently disable outdated AI features on a user's phone until they update their device to remove any content that's been prohibited. These will only apply for iPhones meant for sale within China and not for devices purchased elsewhere. However, Apple Intelligence will not work in the country even on devices meant for sale in other regions once the user changes their location to mainland China.

Tsai said during an event that Apple talked to several companies in the region for its AI needs, including DeepSeek. While Alibaba will be its primary AI partner in China, Bloomberg says Apple will also work with Baidu for certain features like Visual Intelligence, which lets users find information online by scanning items on their phone. For AI features that need additional power and have to be processed through external servers, Apple will likely have to work with a local partner, as well.

As Bloomberg notes, bringing Apple Intelligence to Chinese iPhones is a critical goal for the company. China is Apple's second biggest market, but the company's sales are on the decline as customers turn to local brands that offer AI features on their devices. In the last three months of 2024, Apple's sales in the country dropped by 11.1 percent, putting Apple in third place in the country's smartphone market after Huawei and Xiaomi.